Posted on 06/19/2022 2:22:09 PM PDT by blam
Why Food Inflation Is Only Getting Started
Take a look at this:
Chart of Food Production vs Food Prices
The US has just experienced an 8.8% increase in food prices. The problem (and there are many, actually) is that this doesn’t take into account the spiraling costs farmers are now experiencing.
It’s worth remembering that because farmers pay upfront and only recoup their expenses at the point of sale/harvest months later, all the opex they’ve experienced has a lag.
This lag is dependent on produce but certainly, we’re looking at a tsunami of food inflation 12 to 18 months out.
Then there is the fuel and fertilizer. You’ll hopefully recall our bullish call on both fuel and fertilizer in order to play the entire food cost explosion that is now kicking off. Fuel and fertilizer together are the two largest input costs to farmers, typically exceeding in aggregate 50% of their total costs.
Here’s diesel:
U.S. No 2 Diesel Retail Prices 2022
Then we have fertilizer, itself a by-product of natural gas:
A chart of natural gas prices
Fertilizer has tripled and in some cases quadrupled. What are governments doing to “fix” this? Playing with interest rates. How cute!
Sticking with supply-side economics…
New Zealand to price sheep and cow burps to cut greenhouse gases
There is no question that we need to cut the amount of methane we are putting into the atmosphere, and an effective emissions pricing system for agriculture will play a key part in how we achieve that,” said James Shaw, climate change minister.
James, dear boy, you are either a complete abject moron or you are too cowardly to tell your handlers to go chew on thorns.
I won’t bore you with the details. It’s a tax. Surprise! A tax is administered to the most productive sector of the New Zealand economy.
When New Zealand can’t export the volumes of food it does, then it will quickly experience a widening trade deficit, weakening currency, and an explosion in the price of anything not domestically produced, which includes the coal it now imports (after shutting down natural gas facilities), diesel (which its farmers all use), and fertilizer (again, which its farmers use).
Quickly, New Zealand becomes less competitive on the global agricultural market. It’s just what’s going to happen. This isn’t some hypothetical situation. This is what happens. Watch!
What else?
If you price people out of the necessities of life, two things happen:
They become desperate, and
In desperation, they are susceptible and malleable to “solutions” which would have previously been out of the question.
When the World Economic Forum talks about eating bugs, they aren’t merely suggesting it in the sense that a company marketing a new product would. No. They are telling you.
There will be no choice since via a combination of supply destruction as New Zealand is showing, leading to higher costs and thus pricing more and more people out of the market so they can blame the price increases on the greedy farmers who are killing mother earth.
Think it makes no sense?
It doesn’t have to make any sense. What we learned over the last two years is that a never-ending stream of propaganda will lead the masses to demonize and ostracise those they are told to.
This time it isn’t 'the unvaccinated', though that will not go away. It is farmers,/B>. How dare they provide us with food?
And so it goes. Energy will be demonized. Hence the UK’s most recent 25% “windfall tax” on energy firms in the UK amidst the worst energy crisis of our lifetimes.
This just highlights the importance of why we spend so much energy and time attempting (not always getting it right, mind you) to invest not just in those sectors which benefit (energy and food), but doing so in jurisdictions where this murderous ideology isn’t gaining traction.
It also highlights the reason why we have a disproportionate amount of fertilizer stocks in our “ag” position.
Fertilizer companies can sell their product all over the world and are somewhat less constrained by local politics in any one place.
They are also, as we’ve pointed out many times before, like bloody firecrackers when they have a bull market.
all according to plan
Personally I don’t care if USA people starve, as most are Democrats.
I worry about Americans.
screw bugs
eat the rich
Real Americans are already prepped and working on being self- sufficient.
The propaganda engines need to be destroyed.
“Quickly, New Zealand becomes less competitive on the global agricultural market. It’s just what’s going to happen. This isn’t some hypothetical situation. This is what happens. Watch!”
Hey watch what’s going on in Sri Lanka.
“Real Americans are already prepped and working on being self- sufficient.”
Anyone with half a brain is prepping... and moving from the metro areas.
So many people are thinking emotionally and blind to reality. They are delusional to what’s coming and argue that all is well.
Plus they have no skills, no guns, no grasp of reality along with no brain!
I grew up a poor hillbilly in Pennsyltucky, with a spring house to carry water and an outhouse (tool shed with a basement). Never had heat in the bedrooms. Built wood fires for cooking year round.
We hunted, trapped, fished, picked up roadkill and canned, froze, dried and preserved all we could.
If it happens again, that’s ok.
Most of the city folk will panic big time without fast food and Starbucks.
Farmers are screwed this yr. They can’t control what they are paid for a product like the oil companies.
I am a farmer too. Seed, fertilizer, fuel and equipment costs have skyrocketed. But milk prices are also high now and going higher.
Dairy farms that are vertically integrated should be fine as they use the manure for fertilizer, and grow their own grain for feed. The big factory farms that must purchase in all their feed are screwed, and going bankrupt.
Milk price is now over $25 per hundred weight. It’s been a while since we have seen those prices.
Cull prices for cows is high. All around, as long as any debt is long term fixed rate at a low rate, this inflation wave should be helpful.
This is the time to get debt free while the market still holds.
Produce will be through the roof, primarily due to shipping and fertilizer costs. Grain prices will stay high due to the world market. The pasta I bought at Aldi’s 2 weeks ago for $1.12 per box is now $1.84.
Seed costs have also skyrocketed. I’m in pretty good shape as I purchased ahead, in varieties with a shelf life.
Dog food is about to take off due to the grain and meat content. I have about a year supply, but can feed them my own mix if need be. (and the neighbor’s cats!)
This is about sustainability, not hoarding. Heck, I could survive with a dozen conibear traps.
Farmers have "up front" costs for seed, fertilizer, planting and harvest versus when they get paid for their crop in order to meet their expenses.
That's called the "lag time" !
The result of inflated prices is that more farmers will be going bankrupt, and with fewer farmers, there will be less food
Read the comments for insight !
(From the article):" The problem (and there are many, actually) is that this doesn’t take into account the spiraling costs farmers are now experiencing.
It’s worth remembering that because farmers pay upfront and only recoup their expenses at the point of sale/harvest months later,
all the opex they’ve experienced has a lag.
This lag is dependent on produce but certainly, we’re looking at a tsunami of food inflation 12 to 18 months out.
(My Comment): Most of these calamities are man-made, frequently by government, and it's not by accident.
My concern is not just this year, but what about next years seed (produced from this years crop), fertilizer, and fuel availability for planting and harvest in 2023 .
It is a domino effect that is just starting with this years rising costs
What if it comes to deciding whether to pay the rent or get fuel so that you can to get to work to earn an income ?
Same thing for the farmer !
Think about it (!), and Prepare now
..or else move next to an Amish farmer
Looks like our future again.
Maybe with that will also be a return of sanity and things like morals and integrity.
Our culture is a great example of what happens when people have too much time on their hands, when they are forced to scrape by for survival . They become obsessed with sexual perversion and bread and circuses.
I buy right from the farmers when ever I can.
That way, all the money goes right to them instead of them getting crap for their products and the middle man skimming all the profits.
Farmer’s markets should be a big thing this year.
Don’t buy into the leftist rhetoric.
I refuse to acknowledge the validity of their use of the word “hoarding”.
It’s designed to be strictly inflammatory, to pit people against each other by convincing some that others are holding out on them. Then the have not’s through their own fault, have someone to blame and take it out on while the leftists sit back and laugh at them, the gullible fools doing the leftist’s dirty work for them.
Bookmark 🔖
I agree. Liberals use semantics to manipulate emotions. They always have and always will.
The takeover is in place. They only need the trigger. And there are so many triggers around. Then they unleash their hell on the rest of us.
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